1985 (11) TMI 234 - HC - VAT and Sales Tax

Summary

Issues:
1. Penalty imposition under Section 15-A (1) of the Sales Tax Act for failure to deposit tax within the prescribed time.

Analysis:
The judgment pertains to three revisions filed by the Commissioner, Sales Tax, U. P. against a Sales Tax Tribunal's judgment related to assessment years 1981-82 U. P. and 1981-82 Central. The respondent-assessee had filed monthly returns for October and December 1981, admitting tax liabilities but failed to deposit the tax amounts within the specified time. Consequently, penalty proceedings were initiated under Section 15-A (1) of the Sales Tax Act, resulting in the imposition of penalties. The first appellate authority reduced the penalties, and both the revenue and the assessee appealed to the Sales Tax Tribunal.

The key contention raised was that the respondent-assessee, by issuing cheques without sufficient funds, should not escape the penalty liability as per Section 15-A (1) (a) of the Act. The provision specifies penalties for failure to furnish returns or deposit tax without reasonable cause. The Tribunal found that the assessee had issued cheques in anticipation of receiving payments from the Electricity Board, which were delayed. Subsequently, the assessee deposited the tax with interest upon receiving partial payments from the Electricity Board. The Tribunal concluded that there was a reasonable cause for the delay in tax deposit and overturned the penalties imposed by the lower authorities.

The judgment emphasized that the determination of reasonable cause is a factual inquiry. The Tribunal's decision to accept the assessee's explanation was based on the evidence on record, indicating no error in law. Consequently, the Tribunal's order was upheld, and the revisions filed by the Commissioner were rejected. The judgment concluded with no order as to costs, maintaining the Tribunal's decision in favor of the assessee.